Bonds

How much should you put towards Bonds? There really is no easy answer to this question. Quite often you will hear an old rule that says investors should formulate their allocation by subtracting their age from 100. The resulting figure indicates the percentage of a person’s assets that should be invested in stocks, with the rest spread between bonds and cash. according to this rule, a 20 year old should have 80% in stocks and 20% in cash bonds.

Some one who is 65 should have 35% of assets in stocks and 65% in bonds and cash. Guidelines are just guidelines, determining the asset allocation of the portfolio involves many factors including your investing timeline, risk tolerance, future goals, perception of the market and income.